Call Me Old-Fashioned But... Give me some “credit”

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I once knew a musician who, upon receiving
his OSAP cheque in the mail, ventured
off to his local music store and blew the
whole thing on a Pearl drumkit. As for
school? Well, I guess you could say he blew
that as well. Now, it goes without saying that
musicians typically aren’t the most savvy
when it comes to managing their finances (a
quick review of MC Hammer’s history will
more than demonstrate what I mean).
However, this phenomenon of frivolous and
irresponsible spending, especially among the
student-aged population, is not exclusive to
us artistic types. Case in point: I was at the
bank the other day and a teller relayed to me
that having a bank account containing several
thousand bones is somewhat of an accomplishment.
Accordingly, it entitles you to a
whole slew of benefits from the elimination
of bank fees on personal accounts and annual
credit cards, to automatic credit approval.

Realistically speaking though, a few thousands
are really nothing – I mean maybe a
few months’ rent or a really wild party, but
after that, I’d be out on my ass in the street if
I didn’t manage to bring in an income some
way or another. Here lies the problem: automatic
credit approval and credit cards have
not only made us completely lose sight of the
true value of anything monetarily-speaking,
but it also has and will continue to lead to
economic crisis. But, is it the fault of the
banks? I’d argue not entirely.

Banks are money-making institutions.
They approve you for credit, and the longer
you take to pay off your expenses, the better
the business is for them. Admittedly, in
recent years, several institutions got greedy
and handed out credit approvals far too easily.
But look where they are now - it’s not like
they didn’t get their just desserts, too.

Stories like the one I opened this piece
with are FAR too common. While in these
situations, it’d be easy to blame the banks for
approving said individuals in the first place –
as extensive employment and credit checks
are supposed to be run prior to being
approved for loans, grants or mortgages –
you cannot always predict who’s just going
to take a loan and run with it. Further, when
you receive advanced monies from a financial
institution, you are required to sign legal
documents binding you to the responsibility
of paying back the monies with interest within
a certain timeframe. Therefore, the people
who are taking advantage of the credit system
we have in place are not only spitting in
the face of the banks, but also in the face of
the entire legislative structure we’ve established,
not to mention they’re making it
increasingly difficult for those who truly
need the startup capital (e.g.: small business
owners, students, first-time homeowners or
car purchasers) to get approved.

Essentially, relying on plastic for everything
– which by definition means putting
off all expenses to a future time when you
hope to have more money – is not a smart
idea for anyone. Further, buying “toys” with
money that could be put away for serious
and meaningful expenses in the future might
be something you want to consider.

Maybe I’m at an advantage here because
my pop’s an insurance advisor, but no matter
what bad financial situation I’ve been in for
the past several years, I’ve consistently put
away $100 to $150 per month into a retirement
savings plan for my future. When we
were kids and our parents bought us piggy
banks, we seemed to have the right idea.
We’d save, save and save until we had
enough to purchase something really valuable
to us, or better yet, we put it all into the
bank for good. Somehow, as we grew older
(and clearly not wiser), we decided instead
that buying that video game or wasting all of
our funds on getting trashed was sufficient
for our futures. We could just use plastic on
everything anyway and live in debt. Well,
there’s certainly no longer a stigma attached
to this idea, as it has become the norm.

But here’s the thing: you never know what
the hell is going to happen in your life. You
know that age-old expression,“The best-laid
plans of mice and men oft go awry.” I don’t
know about you, but I certainly don’t want to
spend my entire existence chained to a desk.
Perhaps you should all be asking yourselves
very seriously, “How much money do I actually
have in the bank?” If you’re bargaining
on surviving on just a few grand (or less)
come hell or high water, you’ve got another
think coming. Start saving now. Start saving
while you’re still young. According to recent
statistics, the average Canadian is not safe
financially (i.e.: living comfortably with all
the amenities, and I’m sure parents still provide
for many of you) at retirement age
unless they’ve got a few million.

Interrobang

The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd in London, Ontario and distributed throughout the Fanshawe College community.